Europe oxo-alcohols producers target stable prices for October

02 October 2013 23:58  [Source: ICIS news]

LONDON (ICIS)--European oxo-alcohols producers are targeting stable prices for October in order to improve their margins following the €40/tonne ($54/tonne) drop in the October propylene contract, sources said on Wednesday.

Propylene prices increased by a total of €110/tonne during August and September, but not all of the equivalent rise in production costs could be passed onto consumers of n-butanol (NBA), isobutanol (IBA) and 2-ethylhexanol (2-EH).

Domestic spot prices were assessed by ICIS on Wednesday at €1,130-1,170/tonne FD (free delivered) NWE (northwest Europe) for NBA, €1,040-1,080/tonne FD NWE for IBA, and €1,430-1,480/tonne FD NWE for 2-EH.

The market remains fairly balanced for all products. The start-up of two large Chinese oxo-alcohols plants raises the prospect of improved global availability, although whether this will have an impact on European supply is not yet clear.

One producer described a strong market for 2-EH with numerous spot enquiries, but said buyers were insisting on October price reductions of €25/tonne to reflect the propylene decrease.

The source noted that NBA demand has declined compared with September, and suggested that this could be the result of BASF's return to normal production following a scheduled turnaround.

A second producer said it would try to hold prices steady, and observed that its prices for 2-EH are €20-30/tonne higher than indicated in the assessed range.

The source described good European demand, poor export opportunities, and a lack of imports arriving in Europe from the US.

A third producer said it is resisting buyers' efforts to achieve reductions based on the propylene price decrease.

A fourth producer indicated stable spot prices at €1,140-1,150/tonne FD for NBA and €1,040-1,050/tonne FD for IBA.

A fifth producer said it is targeting rollover pricing for NBA and IBA in October, and is focusing on margin improvement over sales volumes.

A 2-EH buyer said that one of its contractual suppliers is offering a discount from its usual formula.

A second buyer of 2-EH confirmed that its contract prices would fall in line with propylene this month and said it was not aware of any supply disruptions.

A third buyer said it had been offered 2-EH on the spot market at a price just under €1,400/tonne FD NWE.

($1 = €0.74)


By: Samuel Weatherlake
+44 20 8652 3214



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